Testing 101: Testing Your Business Model Using Strategyzer

Testing helps you systematically reduce uncertainty in your business models and value propositions. This iterative process treats your business ideas as assumptions. These assumptions can be be broken down into falsifiable hypotheses and tested, to identify which ones are valid or invalid. This allows you to invest in what works and find new ideas for what doesn’t. In the process, you will also uncover what your customers care about, how your products and services can deliver value to them, and how you can bring these together into a successful business.

To start this process, you will extract hypotheses from your business model and value proposition to capture what must be true for your idea to work. It’s important to prioritize your hypotheses to ensure you are validating the riskiest first. Next, you will design and prioritize tests that will deliver evidence and insights, to prove your hypotheses valid or invalid. Repeating this process will help you systematically reduce risk as you work towards realizing your ideas.

Let us walk you through the testing process in more detail so that you and your team can begin to adopt this methodology using Strategyzer.

1. Setting Up your Canvases

Before you get into testing your ideas, you will need to represent them on canvases to capture the assumptions you are working with. It is important to set your project up at the start to ensure you are prepared for the rest of the process.

You can start designing your canvases from scratch in Strategyzer or transcribe ideas you’ve explored on a physical canvases. You can add canvases to represent your current state business model and your new ideas. Make sure you give your canvases clear names in Strategyzer that will be easily understood by you and your team. Remember, you can add your business model and its embedded value propositions to the same Business Model Canvas using the app.

If you plan on iterating on your canvas as you collect new information and make modifications, it helps to number your canvases and date them. This way you can look back on your series of canvases and clearly see the evolution of one idea over time. The best way to do this is by copying your most recent canvas and incrementing the number before making further changes. This will allow you to update your new canvas, while keeping the previous one intact.

You are now ready to start extracting the underlying assumptions in your ideas.

2. Adding Hypotheses and Tests

Now that you have your canvases set up, you can begin to identify the riskiest assumptions in your idea by articulating hypotheses for each one, and how you will test them.

You can add and manage all your hypotheses, tests, evidence, and insights from the Testing section of your project. This is where you will primarily work with your team as you identify and validate your hypotheses with the testing process.

To add Hypotheses, go to the Hypotheses tab, click Add New Hypothesis, and fill in the details. After repeating this step for all your key assumptions, you can move onto prioritizing the hypotheses by dragging and dropping them in order. On the hypotheses list you will see the title of your hypotheses, their validity and the status of their tests.

Once you have determined which hypotheses need validating first, you can start adding tests to them. You can add multiple tests to each hypothesis by opening the hypothesis and clicking Connect New, next to Tests. If you want to connect an existing Test, you can browse through these using the Connect Existing option. As you will see, each testing object has it's main details at the top and lists its connections underneath.

Once you have connected tests to your riskiest hypotheses, you can proceed to the Tests tab. All your tests appear in this tab and are divided by their status: Needs Testing, In Progress, and Completed. To move them between these statuses, you need to open the test and update its status.

Now you are prepared to begin the process of executing your tests.

4. Selecting and Starting Tests

By now you have mapped your idea in a business model and/or value proposition canvases, extracted hypotheses, and even designed some tests to help validate these hypotheses. You are now ready to start testing.

You can rank the tests in Needs Testing to help prioritize which ones will help reduce uncertainty most effectively. Quick and inexpensive tests, or those connected to your highest risk hypotheses, should be tested early when uncertainty is at its highest. Once you and your team are clear on which test to start, update its status to In Progress. You can even assign a member of your team to this test, so you can keep track of who is responsible.

As you prepare your test, you can use its Description field to capture details like notes or links to external assets like, interview guides, schedules, and project management systems you might be using.

Once your test is underway, you will start collecting evidence and forming insights, that will help you toward validating your original hypothesis.

5. Adding Evidence To Your Tests

When you begin collecting data from your tests, you can record these as evidence. This item type is designed to store materials collected during your test like, interviews, data sets, and other forms of raw data. You can add the content of your evidence directly to Strategyzer or link to third-party tools.

You can use the Highlights field(s) included on evidence to summarize the key learnings or other details worth calling out. This will come in handy when sharing evidence among your team and for referencing in the future.

It’s best to store evidence, such as interviews, as individual items for easier reference. You can see all the evidence you collected from the Evidence tab, in the Testing section. This list is automatically sorted to showcase the latest evidence collected.

If your team uses value proposition canvases to present or record information from interviews, you can store these in Strategyzer too (just make sure to name them clearly). You can copy the URL from any canvas and include it as a link on evidence and other testing items.

Once you have collected multiple items of evidence, you will begin to spot patterns and identify bigger learnings that you want to record. These learnings, and the actions they suggest, are best stored as Insights.

6. Forming Insights and Actions

Once you have executed your test and collected enough evidence, you can update its status to Complete. You can then begin analyzing the evidence you collected and extracting learnings and actions in the form of insights.

Insights can be added directly to your test and will also appear on hypotheses connected to that test. Be sure to describe your insights in detail and provide links to outside documentation if needed. Logging them individually makes them easier to reference later. Each insight should be backed up with multiple pieces of evidence that support it. You can use the Connect Existing browser to find and connect these items.

Actions are a key component of insights and let you and your team list what changes should be made now that you have new learning. These could include, updating your hypothesis’ validity (did you uncover insights that make the hypothesis valid or invalid?), iterating on your canvas with new information (does your learning suggest a different approach?), or perhaps developing a new hypothesis (do you need to reframe the assumption?).

You can find all of the insights you develop in the Insights tab. You can sort this list by dragging and dropping items, allowing you to emphasize key insights at the top and smaller incremental ones below.

7. Iterating And Continuing Testing

After you have completed a few tests and generated new learning in the form of insights, you will likely be ready to iterate on your canvas. To make a new iteration of your canvas, begin by copying the canvas before making any updates. Make sure you name your new copy accordingly. Once copied, you can begin editing the canvas to reflect the changes you need to make. We like to briefly outline the changes to our canvases by using the Note feature.

Repeat this testing process to keep your team’s momentum. Prioritize your hypotheses, moving any that are validated or invalidated to the bottom of the list and arranging your tests once more to help your team stay on task. Keeping a regular cadence to your testing will help push your ideas forward and reduce uncertainty as you validate your value proposition and business model.

Bonus Tips:

All testing items have a “View in Dashboard” link that will take you to its location in the Testing index. This comes in handy if you lose track of where you prioritized something.

If you realize you have a duplicate item or that you no longer need a testing item, you can delete it by deleting its title and agreeing to the warning modal that appears.